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what is a hedge order?
8 Answers
<p id="isPasted">It is a method of reducing your losses by opening one or more currency trades that offset an existing position. Hedging means coming up with a way to protect yourself against a big loss. </p><p>Hedging forex works by opening a position – or multiple positions – that move in a different direction from your existing trade. The hope is that you’ll create as close to a net-zero balance as possible.</p><p>While you could just close your initial trade, and then re-enter the market later, using a hedge means you can keep your first trade on the market, and make money …</p>
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<p>A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security. Hedging is often considered an advanced investing strategy, but the principles of hedging are simple. With the popularity and accompanying criticism of hedge funds, the practice of hedging became more widespread.</p>
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<p>Hedging is a standard practice followed in the stock market by investors to safeguard themselves from the losses that might arise from market fluctuation. In a way, hedging is the insurance that helps the investor to lessen their losses, but it does not prevent the negative things happening in the course of life or business.</p>
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<p id="isPasted">Hedged orders are orders placed for the same instrument in opposite directions. For example, 1 lot Buy EURUSD and 1 lot Sell EURUSD.</p><p>Financial instruments and market strategies can be used to offset the risk of adverse price movements when hedging against investment risk. Another way to put it is that investors hedge one investment by making a trade-in another.</p>
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<p id="isPasted">Offsetting orders, also known as hedged orders, are orders placed for the same instrument in opposite directions. The orders may be hedging if the suffixes are different, for example, Buy EURUSD and Sell EURUSD.</p><p>There is no margin for hedged orders on Standard Cent, Standard, Pro, Raw Spread, and Zero accounts.</p><p>Whenever you close a hedged order, its counterpart gets unhedged automatically. The remaining order will then be charged margin.</p>
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